The trade dispute between Canada and the US, regarding the softwood lumber, has been going on for 30 years already. At the moment, there are ongoing talks about the renewal of the Softwood Lumber Agreement, that expired in October 2015. Justin Trudeau, Canada’s Prime Minister, together with Chrystia Freeland, the Trade Minister, are working on finding new solutions to solve the issues, as the US Liberals aren’t as interested as the Conservatives were, to make this trade work, according to CBC News.
Trudeau has been trying to raise this concern during the APEC meeting with President Barack Obama, back in November, but it seems that the renewal isn’t possible at the moment. The first SLA was signed in 2006. Since then, the free trade included no tariffs and no restrictions on trade between the US and Canada. At the moment, there is an ongoing standstill, valid for a year after October 2015, during which the US can’t impose any actions on Canada.
Apparently, renewing the deal isn’t enough to solve the issues that have appeared on the way. The US Lumber Coalition says that "border measures against subsidized and unfairly traded Canadian lumber imports are essential — otherwise differences between the U.S. (mostly private) and Canadian (mostly public) timber sales systems give Canadian producers an unfair cost advantage."
As CBC News reported, there are a lot of things that changed since the first deal was signed. The lowering of the Canadian dollar has made imports into the US more competitive and the hit took by the supply of lumber in Canada due to the pine beetle in BC lowered the share of the US market from 40% to 27%. Also, four companies from BC bought mills in the US to isolate them from future trade actions.
At the moment, the Americans seem to be more interested in the Trans-Pacific Partnership, which would allow a competitive market from Chile and New Zealand. And since there is no interest to renew the SLA, the best would be to extend the standstill beyond October 2016. Also, the US lobby works on rejecting import tariffs on Canadian softwood lumber.
For Grenier, a former federal and Quebec trade bureaucrat, said that “nobody really knows what will happen this October”, as imposing new tariffs could take up to 2 years to implement. He explained that the initial deal affected Ontario and Quebec, leaving BC to come up for three-quarters of the exports. "If there's a deal, it will be a more restrictive deal than the last one and it won't be good news for Canada," Grenier said.
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